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Murdoch Wins Magazine Fight As Felker Settles

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Rupert Murdoch, the Australian publisher who acquired The New York Post last week, gained control of the New York Magazine Company yesterday after reaching an out‐of‐court settlement with Clay S. Felker, the founder of the magazine.

The settlement, under which Mr. Felker resigned as president’ and editor of the magazine, was reached after a hectic and often dramatic series of meetings between various combinations of the principals and their lawyers. They worked through the night and until late yesterday afternoon, when the agreement was signed.

The urgency to reach an agreement before a court hearing—scheduled for noon yesterday and rescheduled twice during the day—on Mr. Felker's efforts to block Mr. Murdoch's takeover, was matched only by the urgency of some of the magazine's executives to see if they could put out next week's issue of New York.

On Thursday the staff had walked out to show its support for Mr. Felker and its opposition to Mr. Murdoch. The work stoppage was timed to prevent publication of the issue, dated Jan. 17, which comes out Monday.

Mr. Felker had made the same attempt earlier in the day, but indicated that could not succeed. However, Mr. Murdoch and the other directors pasted proofs—at one point Mr. Murdoch discovered that‐the‐movie listings were for the wrong week and corrected them himself—and prepared copy to go to the typesetters.

There was much confusion because some of the copy had apparently disappeared and it was thought that the writers had taken it with them. According to one report, one magazine executive, apparently sympathetic to the work stoppage, was found putting a batch of copy into his car.

Executives Meet Deadline

Some last‐minute copy still had to go to the typesetters. Mr. Patricof, the chairman, Bartle Bull, a director and the publisher of Firehouse Magazine, and others, including some of Mr. Murdoch's associates at The Post, went to the typesetters a few blocks away and worked feverishly through the night. Their deadline was 6:30 A.M. and they finished at 6:20—in time to catch the airplane to get everything to the printer in Buffalo on time.

New York magazine, which was originally a Sunday supplement in The New York Herald Tribune, was begun anew by Mr. Felker after the death of The Tribune. It is a trendy magazine, full of opinion on what's “in” and “out” these days, and includes articles on politics, self‐improvement, the arts, sex and consumer‐oriented subjects.

Meanwhile, the lawyers were working in their offices and at times in Mr. Murdoch's Fifth Avenue apartment to get the agreement drawn up.

The terms of the agreement are that Mr. Felker gets the terms of his current contract, which still has two years to run and gives him a salary of $120,000 a year. Mr. Felker, who owns about 10 percent of the company's 1,800,000 shares, has been offered the same price of $8.25 a share that Mr. Murdoch has offered to pay for the rest of the company's stock.

This would amount to somewhat under $1.5 million.

The agreement also gives Mr. Felker a period of time—reportedly a year—to pay off his debt to the company, which includes a loan of $250,000.

Under the agreement, 10 contributing editors will stay. It was not immediately clear who they were.

Lawyers for Mr. Felker, Mr. Murdoch and City Councilman Carter Burden—whose sale of stock to Mr. Murdoch was being contested by Mr. Felker—appeared in Federal Court at 5 P.M. before Judge Thomas P. Griesa to announce their agreement. The hearing on Mr. Felker's suit had been scheduled for noon, rescheduled for 2 P.M. and scheduled again for 5 P.M.

Howard Squadron, Mr. Murdoch's law yer, got up and announced: “We are able to report, your honor, that the agreement has now been reached.”

He said that it was the intention of the parties to preserve the “editorial integrity” of the publications of the company, which are New York, New West and The Village Voice. He said that the managing editors of the three publications would be offered two‐year contracts and given editorial control of the publications.

Staff employees who wish to stay on will also be permitted to do so.

About 100 writers, editors and other staff members of New York magazine had gathered at Chicago, a restaurant across the street from the magazine offices at Second Avenue and 41st Street. After the settlement was announced, Mr. Felker arrived and went in through a side door. Then he stood on a chair, occasionally bumping his head on a hanging lamp, and told the staff members what had happened.

After about an hour, he dashed out the side door with reporters racing after him. He looked pale as he tried to make his way to a waiting car.

‘A Terrible Day’

“I can't talk, I can't talk,” he said when asked what kind of a day it had been for him. “It has been a terrible day. I don't know what I will be doing. I will remain in publishing. Journalism has been my life.”

After he left, members of the staff talked to reporters. Some of the writers appeared tube in tears, and many hugged and comforted one another. Some said they would not work for Mr. Murdoch.

“I don't want to work for Murdoch,” said Richard Reeves, a contributing editor. “I think what he has done is despicable.”

Under the settlement. Mr. Felker is prohibited from buying or association with Cue Magazine, a competitor of New York, and Los Angeles Magazine, a competitor of New West.

Some of the editors quoted Mr. Felker as saying that, “starting tomorrow,” he would begin to plan for a new magazine.

The board of directors ‘met for two hours late yesterday afternoon and voted to accept Mr. Felker's resignation and to make Mr. Murdoch chief/executive officer of the New York Magazine Company. Three directors who had gone off the board Monday night were reinstated. They are Mary Joan Glynn, James Q. Wilson and Gordon Davis.

A committee was appointed to look into an agreement between the company and Mr. Bull, which states that the company can match any offer Mr. Bull receives to sell his stock, which represents 10 percent of the company.

There was speculation last night that Mr. Murdoch had named James Brady, one of his associates, to be editor of New York magazine. Mr. Brady is former editor of Women's Wear Daily and The National Star.

A version of this archives appears in print on January 8, 1977, on Page 1 of the New York edition with the headline: Murdoch Wins Magazine Fight As Felker Settles. Order Reprints|Today's Paper|Subscribe